A few improvements to financial policy were recommended, Youngstrom said, including the creation of a credit card policy for city employees and the possibility for more efficient management at the city's compost facility.

Using a PowerPoint presentation, Youngstrom detailed the makeup of Saginaw's revenues and expenditures for the year.

"In 2013 those costs are going to continue to rise," he said. "You're facing a structural gap, obviously, with increasing costs and declining revenue. There is no new money out there for anybody."

The presentation also showed the decline of the general fund balance, the city's main savings account, from nearly $3 million in 2011 to about $1 million in 2012.

The city's water and sewer funds both have revenues that exceed expenditures, but Youngstrom said that is necessary for departments that can expect the need to save for expensive purchases sometime in the future.

Saginaw city leaders plan to meet Saturday, Jan. 26, for the first of the city council's annual strategic planning sessions. City Manager Darnell Earley said he expects to discuss in detail the options the city has to eliminate its structural deficit and ensure financial stability in the years to come.